Deal Pack Blog
Car Dealership Software & Promise to Pay
Given the industry, it’s a fact that not everyone is going to pay you on time. In fact, the lion’s share of your business and your financial health depends on skilled collectors being able to collect on your accounts. Their success is largely based on successfully contacting the customer and obtaining a payment. More often than not, a payment cannot be made immediately, so they do the next best thing. The get a promise from the customer to pay…a certain amount at a certain time in the future.
While this promise is far from an accurate reflection of the collectability of delinquent accounts, in can be used to gauge some trends on your receivables as a whole or even down to specific accounts. What if Joe only pays every other week when he gets paid, but he originally signed a contract with a weekly payment schedule? If he does make his payments for both weeks every other week, it would be best to reschedule his loan so that collectors aren’t wasting their time calling him.
Now you have a promise to collect money from one of your customers. What’s next? Follow up!!! Make sure you are building collections queues by future promises and have your collects work them. Staying on top of your customer’s promises will have an impact on your cash flow. The next step is that the promise to pay date comes and goes, and now this promise has been broken. Again, make sure your collectors are following up with these ‘broken promises’ to figure out why payment wasn’t taken and when it can be made. I’ve seen some excuses as simple as ‘well, you didn’t call me so I could make a payment so I figured it wasn’t important to you’. Managing delinquent accounts on the front end through effect use of the promise to pay will pay dividends for your company.
The last step in this process is having a DMS that can manage the PTP process. Deal Pack has a comprehensive collections module that integrates building queues by future promises, broken promises as well as being able to be sorted and filtered by a variety of criteria, including collector, past due balance, and last payment date, to name just a few. In addition, Deal Pack has a variety of PTP reports, being able to be run both by your total receivables as well as individual accounts, being able to drill down to answer questions like ‘How many broken promises has this customer had in the past year?’ In conclusion, as I stated earlier, the next best thing to getting someone to pay is getting them to promise to pay. Track this action and follow up, your bottom line will thank you!